Three Big Stories to Watch This Weekend

by Greg Valliere, AGF Management Ltd.

Insights and Market Perspectives

THEREā€™S NO SHORTAGE of dramatic stories that will dominate the news this weekend ā€” still another setback for the Russian military; confusion as interest rates fall; and a potential rebuke to Donald Trump in Tuesdayā€™s fascinating GOP Pennsylvania Senate primary, which which we describe below.

THE BIG NEWS COMES FROM UKRAINE, as usual, with reports that Russian troops have withdrawn from territory near Kharkiv, Ukraineā€™s second largest city. Just as Kyiv will never fall, it appears that Kharkiv also is impenetrable.

RUSSIAN TROOPS MAY HOLD TERRITORY in the Donbas region, but their withdrawal from Kharkiv will be a huge morale-booster for Ukraine, still another sign that the Russians cannot win this war as their morale ā€” and supplies ā€” dwindle. Many respected analysts are writing about the post-war climate, probably prematurely, but this reflects a growing consensus that Russia cannot win.

ANOTHER BIG STORY, at least in the financial world, is why interest rates have plunged in recent days. Anxiety over inflation and shortages such as infant formulas has plunged U.S. consumers into a funk; they anticipate a recession, and that may be putting a lid on market rates.

THEREā€™S LITTLE DOUBT that Jerome Powell will hike rates by 50 basis points at the next two FOMC meetings, but the key issue is whether market rates will follow. Treasury paper is the ultimate safe haven (not crypto currencies), and the sudden reversal of 10-year bond yields is one of the big surprises in this volatile spring.

THE BIG POLITICAL STORY THIS WEEKEND will be Tuesdayā€™s wild GOP primary in Pennsylvania; the commonwealth has always has been a fascinating political laboratory ā€” once famously described by James Carville as ā€œPittsburgh on one side, Philadelphia on the other, and Alabama in the middle.ā€ True to form, an enormous upset may be brewing in next Tuesdayā€™s vote to replace GOP Sen. Pat Toomey, who is retiring.

JUST A COUPLE OF WEEKS AGO, the race was considered a cliff-hanger between celebrity Dr. Mehmet Oz, who has been endorsed by Trump, against hedge fund manager David McCormick. Suddenly both of these candidates are running scared as an ultra-conservative African-American woman sprints to the finish line.

THE SUDDEN EMERGENCE OF KATHY BARNETTE has shaken the party and prompted Trump yesterday to reinforce his endorsement of Oz. Barnette is even too right wing for Trump; she has a well-documented history of homophobic and Islamophobic statements; she has called for banning Islam in the U.S. Raised in abject poverty, Barnett is fiercely anti-abortion; she said this week that sheā€™s the product of a rape that occurred when her mother was 11 years old.

AN UPSET BY BARNETTE would be a huge embarrassment for Trump, who said ā€œKathy Barnette will never be able to win the General Election against the Radical Left Democrats.ā€ But voters in Pennsylvania may be sick of non-stop TV ads for Oz and McCormick, who have spent spent about $25 million combined. Barnette has spent less than $200,000 yet polls show all three are essentially tied.

A WIN BY BARNETTE, who still claims the 2020 election was stolen, would help the Democrats. But their most electable candidate, centrist Connor Lamb, trails radical Lt. Gov. John Fetterman, who campaigns in beat-up shorts and embraces the Bernie Sanders agenda. The 2022 political season is about to heat up dramatically next week.

The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.

 

 

 

 

The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.

AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.

This post was first published at the AGF Perspectives Blog.

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